Russia in talks with Saudis on ‘oil market stability’

Russia’s oil minister said Moscow and Saudi Arabia are in talks to reach “oil market stability” and that a freeze on output levels is still on the table.

“We are ready to achieve the widest possible level of coordination… and put in place joint measures to achieve oil market stability, with the condition that these measures will not be for a limited period of time,” Russian Energy Minister Alexander Novak told Saudi-owned newspaper Asharq al-Awsat on Aug. 15.

Russian Energy Minister Alexander Novak. /AFP

Getting Iran on board for the freeze option is not likely, analysts say. Talks on a global oil production level freeze collapsed in April after Iran refused to reduce its output levels.

Novak said that a complete return of market stability is only likely in 2017.

“We are cooperating in the framework of consultations regarding the oil market with OPEC countries and producers from outside the organization, and are determined to continue dialogue to achieve market stability,” he said.

Saudi Arabian Energy Minister Khalid al-Falih said on Aug. 14 that Riyadh would work with OPEC and non-OPEC members to help stabilize oil markets.

Oil prices extended gains after Falih’s remarks, which analysts say indicated that Saudi, OPEC’s largest producer, is worried that oil prices could fall towards $40 per barrel or lower due to oversupply.

OPEC members will meet on the sidelines of the International Energy Forum (IEF) in Algeria from Sept. 26-28.